02.12.22

The Stock Market Hasn’t Looked This Cheap in Nearly Two Years

by: Karen Langley

U.S. stocks appear cheaper than they have since the early days of the COVID-19. Although major indexes are still hovering near record levels, a punishing early-year selloff in technology and other growth stocks has brought valuations down closer to historical norms. The U.S. stock benchmark traded late last month at as low as 19.3 times projected earnings over the next 12 months, according to FactSet, falling below 20 for the first time since April 2020. That was down from the 21.5 multiple at which the benchmark entered the year but still above the five-year average of 18.9. Worries about how quickly the central bank will raise interest rates and how the economy will respond have made investors cautious about calling a bottom to the selloff. Many expect that companies will need to deliver robust profit growth for stocks to embark upon a sustained advance.

Read the full article on Wall Street Journal